 Internal Revenue Service IRS Tax News! IRS Updates Frequently Asked Questions and Answers for 2021 Recovery Rebate Credit, but first, an attempt at a joke, I apologize in advance. One of the most intimidating of the United States, over $30 trillion debt collectors is known as Bond, Treasury Bond. The Administration assures us Biden can handle Bond. However, doubts have been had. I mean, the last time Bond confronted Biden about our outstanding bill, the President seemed to think he was a duck being complimented. However, the Administration assures us it's all part of a complex plan. President Biden is ten steps ahead of Bond, stating President Biden is playing chess, Bond is just playing checkers. Well, at the same time President Biden was currently playing with his mask, his advisors gently reminding him, the mask goes on your face. Most likely President Biden was imagining the mask to be the versatile queen on the chessboard, which he planned to masterfully maneuver in such a way as to be able to ask the opponent's pawn for a loan. You know, just to hold me over until tax time. Did President Biden really think he was a duck? Hey, if it walks like a duck, if he's a quack like a duck, maybe the most powerful country on Earth is being run by a duck. And certainly not the sharpest razor in the raft. I are 2022-28 February 8, 2022 Washington. The Internal Revenue Service today updated frequently asked questions, the FAQs for the 2021 Recovery Rebates Credit. These FAQs, FS 2022-09, there's a link to that here. We're updated 2021 Recovery Rebate Credit Topic A, General Information. There's a link to that here. 2021 Recovery Rebate Credit Topic D, claiming the 2021 Recovery Rebate Credit. There's links to those here. 2021 Recovery Rebate Credit Topic F, receiving the credit on a 2021 tax return. Updated those. There's links to that here. 2021 Recovery Rebate Credit Topic G, finding the third economic impact payment amount to calculate the 2021 Recovery Rebate Credit. Individuals who did not qualify or did not receive the full amount of their third economic impact payment may be eligible to claim the 2021 Recovery Rebate Credit based on their 2021 tax year information. So just remember that there's three of these economic impact payments were basically concerned of at this time. You might hear them or know them as stimulus payments. And the first two you want to keep in a separate group as the second one. You can think of these payments as in essence prepayments of something that would be tied to the tax return or the tax year. The first two being tied to 2020 tax year and instead of waiting until someone files the tax return in order to give the amount out. They gave the amount in the prepayment in the form of the stimulus payment, which is basically a prepayment of the recovery rebate credit, which for the first two were tied to the 2020 tax return. Now those two, the names is kind of confusing because they're nothing alike, right? You got the stimulus payment or the economic impact payment, the EIP and then the recovery rebate credit. And the EIP is the prepayment of the recovery rebate credit in a similar way as the advanced child tax credit is a prepayment of the actual child tax credit that you would be recording on the tax return. So even though the stimulus payments were the first before this advanced child tax credit payment, I think people might understand how the advanced child tax credit payment works because of the name being an advanced child tax credit payment, a child tax credit payment being something that we're already familiar with with regards to the tax return. So I think there's some confusion with the stimulus payments. I know there was in the prior year because it backed up the IRS a bit for some misinformation or tax returns that weren't being completed exactly properly given the recovery rebate credit. So the third recovery rebate credit then is a prepayment for the 2021 tax year. And if you didn't get the stimulus payment or the full amount of the stimulus payment, then the remedy for that would be to file the tax return for 2021 claim the recovery rebate credit then. Okay, individuals may have received their third economic impact payment through initial and quote plus up payments in 2021. Note third economic impact payments are different than the monthly advanced child tax credit payments that the IRS dispersed from July through December 2021. Most eligible people already received their economic impact payments and won't include any information about their payment when they file. However, people who are missing stimulus payments should review the information on the recovery rebate credit page. There's a link to that here to determine their eligibility and whether they need to claim a recovery rebate credit for tax year 2021 to claim any remaining credit for 2021 eligible people must file a 2021 tax return. Even if they usually do not file taxes, also people who did not receive all of their first and second economic impact payments in 2020 can receive those payments only by filing a 2020 tax return or amending a previously filed return and claiming the 2020 recovery rebate credit. They should review the recovery rebate credit page to determine their eligibility. For 2021 recovery rebate credit can reduce any taxes owed or be included in the tax refund for the 2021 tax year. And filers must ensure to not mix information from their 2020 and 2021 tax years. In particular, filers should not care should not should take care not to include any information regarding the first and second economic impact payments received in 2020 or 2020 recovery rebate credit on their 2021 tax return. I'm sure they're worried about this happening. I'm sure it's going to happen no matter what they do because this is confusing because you've got three economic impact payments which people kind of think of as kind of the same kind of thing. And the first two are and their prepayments, the prepayments that are called different names economic impact payments or stimulus payments and they're tied to the tax return in an advanced format which people aren't completely used to at this point. And the credit on the actual tax return that they're tied to is completely different in name called the recovery rebate credit. And these two payments are spanning to two different tax returns. The first two on the 2020 tax return, the last one on 2021. So there's going to be there's going to be some confusion, I would say here, but try to keep it straight on your tax return so that when you file it that you can do it correctly because if you get this wrong, it's likely that it will go into something that needs to be updated or will need some kind of manually fixing on the IRS's side of things. And they're backed up on that kind of stuff that will delay a refund. And if you're looking for the refund, try to get this stuff right. Tax software will help with it. They will need to they will need the total of their third payment received to accurately calculate the 2021 recovery rebate credit. When they file their 2021 federal tax return in 2022 individuals can now view this information in their online account. There's a link to that here so you want to get access to the online account. It looks like last time they they're doing away with this facial recognition thing which was really hard to get an online account. I think you can still have an online account with like a normal kind of login and verification and whatnot. And if you get the online account, then you can see on these these prepayments that you have gotten as well as the child tax credits. They should send you out a letter with it too, but it would be nice if you had access to the online account so you can kind of double check there. What the IRS thinks they have sent you with regards to all these prepayment kind of things that are so popular at this point. So people can also locate this information on notice 1444C which they receive from the IRS during 2021 after each payment as well as letter 6475 which the IRS will mail to them through March 2022. The FAQs frequently asked questions cover most questions related to claiming the credit and are for use by taxpayers and tax professionals and are being issued as expeditiously as possible. I always get that word mixed up, expeditiously. It's not expediently, expeditiously, expeditiously. File for free and use direct deposit. Taxpayers with income of $73,000 or less can file their federal tax returns electronically for free through the IRS free file program. There's a link to that here. The first way to receive a tax return is to file electronically and have a direct deposit into a financial account. Refunds can be directly deposited into bank accounts, prepaid debit cards or mobile apps as long as routing and account number is provided. More information about reliance is available. There's a link to that here. There's links to some other of this information, the FAQs and what not. There'll be a link to this in the description.